FAQ: Why is blockchain attractive?

Beauty of blockchain lies in common agreement

Everyone can agree upon a single published block chain that is the agreed upon history which transactions have happened.

People can agree which transactions are valid and which transactions have actually occurred.

Ability to assign IDs to things in a decentralized way.

This means there is no need for central authority. No one has the final say unlike cash, where central banks decide the volume of money.

FAQ: How do we know if a blockchain transaction is valid?

4 premise to check for transaction validity

  • First, if the consumed coins are valid, that is they really were created in previous transactions. 
  • Second, that the consumed coins were not already consumed in some previous transaction, this is not a double-spend.
  • Third, that the total value of the coins that come out of this transaction is equal to the total value of the coins that went in. 
  • And finally that the transaction is validly signed by the owners of all of the consumed coins. 

FAQ: Who guards the creation of bitcoin?

A crypto currency transaction is always valid. This is so because the user said so. He puts it in the block's history, signs it and this has to be valid.

The beauty of cryptocurrency is here - there is no need to worry if someone is entitled to create coins. Anything that's placed in the history and signed, is valid. This is where the efficiencies of transactions are derived.